IT SEEMED like such a comeback. When Pedro Parente took over as boss of Petrobras in 2016, Brazil’s state oil firm was drowning in $130bn of debt. It had lost $200bn in shareholder value, and its executive board had been gutted by the massive Lava Jato corruption scandal. Mr Parente slashed subsidies, sold assets and adopted a market-friendly pricing policy. The company’s debt shrank and the share price reached a 3½-year high in May.

Then, on June 1st, Mr Parente resigned and Petrobras’s shares plunged by over 20%. The cause was a ten-day lorry drivers’ strike that crippled Brazil’s economy and forced Petrobras to freeze diesel prices for ten days and the government to subsidise them for two months. That revived a conversation about price controls and fuelled concerns about future state meddling.

The same fears hang over Pemex, Mexico’s state-owned oil giant, ahead of a general election on July 1st. The...